Good breaks above $2300, Yen Skids Against Major Currencies

Equities

On Wednesday, the UK's blue-chip FTSE 100 index saw little change, closing the day almost flat as a stronger pound exerted pressure, counterbalancing gains from the mining, energy, and banking sectors. The strength of the pound, appreciating 0.5% to $1.26, notably affected the index, especially impacting shares of major dollar earners like Unilever, Diageo, and AstraZeneca, which weighed heavily on the market. Despite this, precious metal miners enjoyed a 2.1% increase, buoyed by gold's continued ascent, while energy stocks rose by 1%, driven by ongoing concerns over oil supply risks.

In specific company performances, Topps Tiles saw its shares drop by nearly 4% after signalling subdued demand within the domestic repair and maintenance sector for 2024. Renishaw also experienced a decline, falling 2.5% following Siemens' announcement that it had no plans to make an offer for the engineering firm, quelling speculation of a potential buyout.

In the US, the S&P 500 and Nasdaq made slight gains, whereas the Dow Jones Industrial Average dipped slightly. This came in the wake of softer-than-expected services sector data for March and comments from Federal Reserve Chair Jerome Powell suggesting that interest rate cuts were not imminent despite the economic slowdown. Powell's reaffirmation of a wait-and-see approach was influenced by the enduring strength of the US economy and recent higher-than-expected inflation figures.

Intel saw an 8.2% decline in its share price after disclosing a $7 billion operating loss for its foundry business in 2023, a significant increase from the previous year. Ulta Beauty's shares also took a hit, dropping 15.3% after the CEO warned of sluggish demand in the first quarter.

Forex & Commodities

The greenback has risen approximately 3.3% this year against a basket of currencies, with the markets now anticipating less aggressive rate reductions than previously forecasted. Despite a slight expectation of a cut in June, the total anticipated cuts for the year are now around 75 basis points, down from earlier expectations of nearly 150 basis points.

Gold prices surged to a record high, crossing $2,300 per ounce, following Federal Reserve Chair Jerome Powell's remarks that did not materially alter the Fed's policy outlook for the year, despite acknowledging strong job gains and inflation. This increase marks gold's over 11% gain so far this year, fuelled by strong central bank purchases and demand for safe-haven assets.

Oil prices reached their highest levels since October, with Brent futures settling at $89.35 a barrel and US West Texas Intermediate at $85.43 a barrel. Athough gains were tempered by an unexpected increase in US crude oil inventories. The Organisation of Petroleum Exporting Countries and its allies, including Russia, have decided to maintain current oil supply policies, with some countries pledging to offset oversupply from the first quarter.